Australia is expected to spend $3.8 billion on cybersecurity in 2018, up 6.5 percent from 2017, according to Gartner.
The research firm predicts that spending will be driven by regulations, shifting buyer mindset, awareness of emerging threats and the evolution to a digital business strategy.
"Overall, a large portion of security spending is driven by an organisation's reaction toward security breaches as more high profile cyberattacks and data breaches affect organisations worldwide," Gartner research director Ruggero Contu said.
"Cyberattacks such as WannaCry and NotPetya, and most recently the Equifax breach, have a direct effect on security spend, because these types of attacks last up to three years."
Worldwide spending is forecasted to total US$96.3 billion in 2018, up seven percent from 2017.
The findings are sourced from Gartner's 2016 security buying behavior survey, where 53 percent of organisations cited security risks as the main driver for overall security spending.
A total of 512 respondents from Australia, Canada, France, Germany, India, Singapore, the United Kingdom and the United States participated in the survey.
With these findings, Gartner believes security testing, IT outsourcing and security information and event management (SIEM) will be among the fastest growing security sub-segments driving growth in the infrastructure protection and security services segments.
Also fueling higher security spending is regulatory compliance and data privacy, particularly in the United States, China and the European Union.
The regulations would then result in increased spending on data security tools, privileged access management and SIEM.
Gartner also forecasts that more than 60 percent of organisations will invest in multiple data security tools such as data loss prevention, encryption and data-centric audit and protections tools by 2020, up from 35 percent this year.
Automation and outsourcing are also seen as areas of growth in security spending due to skill shortages, technical complexity and the threat landscape as a whole.
“Skill sets are scarce and therefore remain at a premium, leading organisations to seek external help from security consultants, managed security service providers and outsourcers," Contu said.
"In 2018, spending on security outsourcing services will total US$18.5 billion, an 11 percent increase from 2017.”
“The IT outsourcing segment is the second-largest security spending segment after consulting."
Enterprise spending on security outsourcing is projected to be 75 percent of spending on security software and hardware products in 2019, up from 63 percent in 2016.
Gartner said enterprise budgets are starting to shift towards detection and response, which it believes will drive security market growth during the next five years.
"This increased focus on detection and response to security incidents has enabled technologies such as endpoint detection and response, and user entity and behavior analytics to disrupt traditional markets such as endpoint protection platforms and SIEM," Contu said.